Last week, Facebook unveiled some major changes that will have far reaching implications for users and marketers. The following is our point of view for companies using Facebook to engage customers and prospects.
Users have already noticed changes to Facebook such as the running stream of posts in the right column called the ticker and a new ranking of top stories and recent stories. Also, users can now “subscribe” to aspects of friends’ feeds or to people who are not their friends — a nice feature for following bloggers or content producers as you would on Twitter. The biggest changes in last week’s updates include a reimaging of user profiles and the use of apps to interact with companies and your friends in real time. With this POV is a summary of recent articles and analysis that will give you specific details surrounding such changes as well as insight to Facebook’s strategy.
Before looking at the recent changes it is instructive to review the financial and competitive landscape. Google+, Twitter and FourSquare, among others, are gaining momentum and competing with Facebook for user attention, online time, and marketing dollars. The Financial Times recently reported that Facebook is delaying their IPO until later next year. This is not just any IPO, as it has been valued at least $66.5 billion with many investors (including Goldman Sachs) and employees looking for a payout. Financial Times reports that 2010 revenue was around $2 billion and reportedly $1.6 billion for the first half of 2011. The recent changes are likely tied to the IPO plan for the following reasons:
- Facebook is looking to fend off other social networking sites and capture a larger share of user time and online engagement. The stronger they cement their hold on end user time and online commitment, the higher the share price.
- The increased amount of personal data and activity generated from users will give advertisers greater opportunity to run behaviorally targeted ads. Again, more revenue streams mean a higher initial price.
- Create a possible revenue stream from apps developed by companies seeking Facebook users.
- Management likely wants to have all these changes implemented before the distraction of key employees concerned with shares and payouts begins. Anyone who has ever gone through and IPO knows that the focus becomes internal when the payout time comes close.
Implications for Users/Customers:
Users will have the ability to create a timeline which takes the profile concept to a new level by “telling the story of their life” to quote Facebook CEO Mark Zuckerberg. It remains to be seen if this is a response to user needs or an opportunity to get more detailed information on users for marketers and advertisers. While we think this may appeal to a younger demographic, it is unclear how older professionals (the fastest growing segment of users) will respond. For many, Facebook is about connecting with friends in the here and now, not taking a trip down memory lane. Have users been clamoring for this feature to enhance sharing of personal data? This may be more spin than reality, but many users will take advantage of these features. Such new features may be aimed more so at younger users who have grown up using Facebook as a primary means of communicating with friends. When Timeline was being rolled out during the live streaming broadcast, dozens of viewers (including this one) were immediately reminded of MySpace, albeit it with a Word Press skin.
Users will also have a chance to engage with apps and share what they are doing in real time, i.e. eating, reading, searching, etc. This is what Mark Zuckerberg was referring to as making “Like” a verb. It is easy to see how marketers can create selling opportunities with this information. But, how users will feel about giving up this much privacy is an open question. There will be privacy and sharing controls, but it remains to be seen how much users will want to broadcast their web activity in real time. It is becoming clear that Facebook wants to be the layer on top of the web that connects your activities to your friends and the companies who want to engage you. We also see this as an age-divide as younger users will embrace the sharing while older users may not be keen on broadcasting their actions. However, they may selectively share special interests they feel passionate about.
Implication for Marketers
Fan pages are not changing for now, but will likely change into the Timeline format. If you have a fan page you need to be mindful of the new GraphRank, which “decides” what goes into “top stories” in users’ news feeds. Ranking will likely depend on the overall quality of the content and the level of interaction. It will be more important than ever to have a cohesive content strategy that can be distributed through your fan page. And, you will need to post somewhat frequently to become part of the algorithm behind GraphRank. It will be critical to generate comments, shares and likes with your post.
Apple proved how apps transform the relationship between company and customer, and now Facebook is adopting the app model — and many companies already signed on at launch (Nike, Hulu, Netflix). Companies will have an ability to distribute content and sell products within the walls of the Facebook community. And, activity will be broadcast to each customer’s friends when they take an action. The Washington Post and Wall Street Journal have recently launched social readers on Facebook that have a Flipbook format (an iPad app feel). The influence of the iPad and tablets are having an effect on content distribution. In fact, the new Timeline has a similar graphic interface sensibility.
Next Steps for Marketers
Closely monitor your customers and prospects to see if their Facebook behavior changes in the near term. There has been a lot of negative user feedback to the newsfeed changes, the introduction of top stories, and the ticker. The feedback has centered on layout confusion, and a perceived lack of privacy in the ticker. Much of the reaction is dependent on the demographic profile of your customer.
If you have a fan page, it is time to reevaluate your content and engagement strategy to ensure you will still be seen in your fans’ news feeds. The content needs to be actionable to drive comments and shares. Additionally, consider developing an app that may integrate with your website and/or mobile app. Facebook is the most visited, viewed and searched website in the world, so your business should have a strong presence and an engaging store front if you sell to the general public.
If you advertise on Facebook, chances are the ability to target by demographics, interests and behaviors will get a lot better. For example, if someone shares that they are involved in a specific sport such as running, they can be immediately targeted for a host of running related products and services. The ads will hit them when they are in running mode. That brings advertising a long way from unrelated ads running on TV, radio or in a static magazine.
These changes will open up new exciting opportunities for marketers to create a direct channel to customers and prospects, and it should be considered a key part of an integrated media campaign. However, marketers should be wary about putting too many eggs into a basket that is being created for a monster IPO.
For any questions about this POV please contact Gordon Plutsky, CMO, King Fish Media: firstname.lastname@example.org or 978.832.1485. Follow Gordon @gordonplutsky
Last week we attended the first ever Content Marketing World (CMW), and it was a rousing success with 631 attendees and many sponsors. Don’t fear if you missed it, King Fish Media is partnering with CMW to provide an on-demand video version complete with synced presentation slides of the conference to be avaliable in October – more about that when it launches.
Here is a round up of observations and random thoughts from my three days in C-Town (a.k.a. Cleveland for those in the know).
1. Starting the conference with the back-to-back keynotes from Sally Hogshead and David Meerman Scott was masterful. Her concept of “Fascination” and the F Score is a brilliant marketing paradigm to understand what motivates customers. Creating an aura of fascination around your brand with content can turn the ordinary into something special. I’ll follow up with a more detailed look at the F Score next week.
2. Sally got the attention of everyone in the room by telling marketers they have 9 seconds to get the attention of a consumer. This is a similar concept to what I wrote about last month about the quickening pace of content consumption, and that our brains have rewired to expect fast and shorter bits of information. Therefore, you better be fascinating or at least interesting if you want a customer to read and engage with your brand.
3. I was excited to hear David Meerman Scott (DMS to insiders) as I have read his books and follow his blog. He made great points about content authenticity and he shares my pet peeve for using stock photos of multicultural models (complete with funny examples) on your web site to represent customers and employees. He focused on the importance of real time communication in today’s always-connected media environment. Harder said than done for some companies – especially big public companies with lots of layers – but the concept is one all marketers must embrace.
4. One of my favorite sounds bites came from Jay Baer, a member of the panel I moderated on justifying content marketing budget (click here to read highlights). Among many smart things he said, was “helping is selling”. That small phrase is at the heart of content marketing – giving customers value and worth to build affinity and trust. It signifies relationship building vs. the hard sell. It is about permission vs. interruption.
5. As a sports nut, I enjoyed hearing from marketers representing Cleveland’s three pro sports teams and how they are using social media campaigns to interact directly with fans. It is the perfect application for a business where the customers have a long term emotional investment and customer retention success (ticket renewals) is paramount.
6. It was great to hear how big tech companies like Dell, SAS, Intel, HP, IBM and Nuance are creating vast amounts of original content to educate and engage customers and prospects. It makes me very happy that I no longer get paid to sell advertising to tech companies as they don’t need it anymore.
7. Many noted that mobile is a huge opportunity and we are just beginning to scratch the surface of the possibilities. Sherwin-Williams was a featured case study, and they are doing a terrific job creating a content channel for customers. Check out their iPhone app, which helps customers select paint colors – very slick.
8. Additionally, there was lots of great information shared on creating content, storytelling and best practices for managing the process. Also, there was lots of talk about social media and search and not to be outdone – social search. The entire social/search space still suffers somewhat from overhype, but that is to be expected while it is still developing as a marketing channel. That being said I am a huge believer in social media as part of an integrated multi-platform solution, but I am also a believer in print for the right application. And face to face. And mobile. And video, etc. In the 9 second, real time world we need to be everywhere with measurable content based solutions to drive sales. There is no point for companies to create content unless it has an actionable and measureable revenue connection. I often think about the famous quote from Sergio Zyman – “The sole purpose of marketing is to sell more to more people, more often and at higher prices. There is no other reason to do it.”
The conference was full of enthusiasm and passion for our business even though we are stalled in challenging economic times. There was much live tweeting as everyone got caught up in spirit of sharing information and networking. Click here to read what others said about the conference. The future looks very good, and I am sure Joe Pulizzi and the Junta42/Content Marketing Institute team are already hard at work on 2012. Congrats Joe and team, a job well done.
Here is the video that opened the conference.